Used car prices are soaring as car retailers report demand so strong that they “can’t stock the forecourt fast enough” – and supply shortages look to continue the trend.
As Cap HPI head of valuations Derren Martin reported that he had seen prices go “through the roof” with June’s anticipated market-wide used car values rise potentially reaching 6%, retailers told AM that the rate of consumer demand is growing.
One small independent retailer said: “I barely have anything on the website right now. Cars are selling before we’ve had chance to prep them. We can’t stock the forecourt fast enough.”
Among the price rise seen by the shell-shocked trader was a Range Rover Evoque, which had risen in value by £2,200 since Saturday according to industry valuations, and a van which had gone up £7,000 in a year.
Asked when the surge in consumer demand was expected to end, the trader said: “When people can start spending on other things… Holidays and weddings.”
Today the latest Indicata Market Watch used car insights report said that used hybrid and petrol vehicle sales rose by 30% and 23% respectively from March to April as dealers opened up showrooms again for the first time in three months.
April sales were higher than those of July 2020 when the market experienced a major increase after lockdown 1.0 and when consumer spending switched from foreign holidays to buying used cars, it said.
Indicata said that used car prices that started rising in April and have continued through early May, adding that this was “a trend that may continue as semiconductor shortages look set to impact new car sales for the next few months at a time when used cars are already in short supply”.
According to Indicata, demand for used EVs in April continued to be the weakest amongst all powertrains with a stock turn of just 6.1, equivalent to 59.8 days in stock per vehicle.
In contrast used petrol cars at 9.9 and used diesels at 9.7 were selling at around 37 days.
Indicata sales director, Jon Mitchell, said: “April was a record sales month, but already the pressure on supply is starting to show which is in turn forcing prices upwards.
“A shortage of semiconductors is already affecting new car sales so we predict used prices will continue to rise.
“We could be witnessing these market conditions throughout the summer months until the new car production challenges are resolved,” he added.
Speaking to AM this morning (May 20), Marshall Motor Holdings chief executive, Daksh Gupta, acknowledged that new car supply shortages looked set to continue the trend of a buoyant used car market.
Marshall’s used car unit sales were up 42% on a like-for-like basis in the four months to April 30.
Commenting on the new car supply shortages triggered by the semiconductor microchip crisis, Gupta said: “It’s more complicated for us as we have 17 car brands, some of which say they don’t expect and impact, others suggesting it may be 40%, and some saying the issues will extend into 2022.
“It’s a difficult issue to get a handle on.”